Pakistan Economy - News & Updates - Archive

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Saturday, April 22, 2006

ISLAMABAD: Underlining the vital link between energy security and growth momentum, Prime Minister Shaukat Aziz has said that the government is looking for power generation from all possible sources, including wind energy, and the country will be producing 100 megawatt wind energy by June this year.

He was talking to a delegation of companies involved in the production of wind power. The delegation included Brain Fitzpatrick of AXOR, Canada, and Rafiq Dawood, Chairman of Win Power.

Pakistan, the prime minister said, has vast scope of generating energy from wind because of its geographical location. Many parts of the country, especially in Sindh, lend themselves to obtaining energy from wind.

He added that the government is working to expedite development of alternative sources of energy to meet the growing demand of power at a fast pace, as well as to produce cheaper and environmentally-friendly energy in the country.

The prime minister said that the government has prioritized electrification of remote villages through wind and solar generating projects to provide cheaper electricity to the people of these areas and 500-600MW power generating capacity will be installed by 2007.

The delegation informed the prime minister that a consortium involving MS/AXOR of Canada and First Dawood Group would establish a 50MW wind power project at Gharo, Sindh, to meet the urgent needs for electricity in Pakistan. The project will be functional by the summer of 2007.

Brian Fiztpatrick appreciated the investment friendly policies of the government and the cooperation extended by it in the implementation of the project. The meeting was attended among others by Air Marshal Shahid Hamid (retd), Chairman of the Alternative Energy Development Board, and senior officials.

 

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Saturday, April 22, 2006

LAHORE: WAPDA has already supplied electricity to 9,300 villages and it will achieve its target of 13,000 villages by June, said WAPDA Chairman Tariq Hameed on Friday. Tariq was talking to reporters after attending a meeting presided over by President General Pervez Musharraf and attended by Prime Minister Shaukar Aziz in Rawalpindi.

The chairman said the president wanted electricity supplied to 15,000 villages between July 2006 and June 2007. He said that except or certain parts of Balochistan, all villages of Punjab, Sindh and NWFP would be provided electricity by December 2007.

 

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By Dr Akhtar Hasan Khan

BOEKE, a Dutch economist, enunciated the concept of duality in colonial developing countries. The two sectors which he identified were the metropolitan sector and the indigenous sector. By metropolitan sector he meant the thriving cities of Calcutta (Kolkata), Madras (Chenai), Bombay (Mumbai), Karachi, Delhi and few other big cities. The indigenous sector meant the vast backward rural country side.

This duality in the economy exists in almost all developing countries — between the industrial-***-urban sector and the rural-***-agricultural sector. As the majority of the population — more than 60 per cent in Pakistan, — still lives in rural areas, this duality is still a striking feature. In developed countries there is no such duality because the rural population depending on agriculture and agriculture’s contribution to the GDP is less than five per cent. In fact, in developed countries services’ contribution to the GDP is more than twothirds.

In China and India there is geographical duality also. In China the eastern sea board provinces are glowing with economic progress whereas the western landlocked provinces are still relatively backward. In India the southern states of Tamil Naidu, Karnataka, Maharashtra and Andhra Pradesh have much better economic and social indicators than the northern states of Uttar Pradesh, Bihar, Rajasthan and Madhya Pradesh. The southern states have also much better gender empowerment and religious tolerance.

Pakistan is no exception to this general duality in the economies of developing countries. The economic progress of Pakistan during the last six years has exacerbated this differential. There has been commendable progress in the industrial-***-financial sector. Large-scale manufacturing during this period has grown at an average rate of 11 per cent. Exports have more than doubled from eight billion dollars to $17 billion a year. The profits of the banking sector have almost tripled. The foreign exchange reserves have risen from one billion dollars to $ 12 billion, though the latest figure seems to have been artificially boosted by selling valuable national assets at throwaway prices to foreign firms.

The asset owners, whether of real estate or shares, have never had it so good as under the present regime in the entire history of Pakistan. The share index has multiplied by eight times — from 1,500 to more than 12,000. The real estate prices have skyrocketed by four to five times, especially in urban areas. The increase in remittances from one billion to more than four billion dollars after 9/11 has contributed to this golden period for asset owners. The business-friendly and stable economic policies of the present government have also contributed to this asset boom.

The cement production and demand in Pakistan has increased from 12 million tons a few years ago to about 20 million tons now. The surge in cement demand indicates a spurt in construction activity which reflects a higher level of investment in both the public and private sectors.

There has been a stark and equally significant stagnation in the rural-***-agriculture sector. The average growth rate of agriculture during this period is only two per cent and if we exclude the freak growth rate (7.5 per cent) in agriculture during 2005 the growth rate in agriculture in the remaining five years is just under one per cent. Even the average of two per cent for the whole period is less than the rate of population growth in rural areas of more than two per cent.

Hence, despite the government’s claims to the contrary, rural poverty has risen as indicated by the official figures of agricultural and population growth. Development economists all over the world are unanimous in stating that for rural poverty to decrease in a sustained manner, the agricultural growth rate must be more than four per cent. Pakistan’s performance in this vital sector is much below the norm.

It is often stated that rapid growth in industrial-***-urban sector has a trickle-down effect on the rural sector. The trickle effect is both horizontal and vertical. Horizontally, the rapid industrial growth leads to a spurt in demand for agricultural products and induces underemployed rural population to migrate to the urban areas which offer better utilities and education-***-health facilities. As there has been stunted agricultural growth, the increase in demand for agricultural products which are mainly food has led to inflation at an average rate of 10 per cent during financial years 2005 and 2006. Hence there has been a negative impact on consumers all over the country by this sharp differential in industrial and agricultural growth rates.

The State Band of Pakistan in its latest second quarterly report for 2006 has stated, “it is important to note that monetary policy alone will not be able to contain all of the rise in inflationary pressures. In particular, there is an urgent need for the government to supplement its very laudable supply-side measures with policies to address market structure problems. Specifically, anecdotal evidence clearly suggests that in recent years, speculative hoarding and collusive price setting have been significant contributors to domestic inflationary pressures in markets. Such pressures respond more to legal and administrative measures, and are less sensitive to monetary tightening”. The SBP could not have been more blunt in criticising the government’s failure to control “speculative hoarding and collusive price setting”. The failure of the government to control the sugar cartel led to reduction in sugarcane output, doubling of sugar retail prices and sugar import of more than $ 450 million so far in fiscal 2006. The uncertain policy towards wheat procurement and the greater role given to the private sector is helping neither consumers nor producers.

The vertical trickle-down effect takes a lot of time to materialise and that too with limited impact. Famous economist John Galbraith lampoons, saying that “trickle down is like giving lots of grains to horses so that birds may have extra food on the streets”. If a person earns an additional crore in urban areas, he is most likely to spend it on buying better cars, houses and foreign travels. The real trickle down effect will be in employing more domestic workers or security personnel or construction workers. There will be an impetus for workers to migrate to big cities as Pathan workers have moved to Karachi but the overall impact in such cases is small and limited.

The spurt in construction activity has strong trickle down effects as it has maximum forward and backward linkages in the economy and it is also more employment-intensive than large-scale manufacturing.

The agricultural stagnation in Pakistan stems from policy failures. Our economic policymakers who have excellent urban background have neither the understanding nor the urge and sensitivity towards improving the lot of the rural poor. The GST on fertiliser and raising the price of gas for fertiliser factories has led to a sharp increase in fertiliser prices. The same is true of energy inputs of diesel and electricity for the agricultural sector. The spike in the price of agricultural inputs is far higher than a small increase in the prices of agricultural products especially for the small tenant farmers with no title to land which is a prerequisite for agricultural loans have been doubly hit.

The GDP growth rate in 2006 will be slightly above six per cent and has fallen by more than two per cent as compared to last year’s stellar GDP growth of 8.4 per cent. Our economic policymakers need to understand the basic fact that high GDP growth of eight per cent plus cannot be sustained without a medium four per cent plus agricultural growth. The policies they have pursued in agricultural sector have failed to deliver.

There is an old economic adage, “The rich get richer and the poor get children”. With rising inequalities in income distribution and the highest rate of population growth among major developing countries, this adage is truer about Pakistan than about any other developing country.

The writer is a former secretary, planning.

 

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WASHINGTON, Apr 21 (APP): There is an immense investor confidence in the economic reforms and booming Pakistan economy, Dr. Salman Shah, Advisor to the Prime Minister on Finance and Economic Affairs, said Thursday.

At a Press briefing at the Pakistan Embassy, he mentioned new benchmarks having been set.

Dr. Shah is in the US as the head of a delegation to attend the annual Spring Meetings of the World Bank and the IMF.

"This is very important, because it sends a signal to our domestic audience, as well, that Pakistan's economic reforms have worked well, have been deep-rooted and broad enough for the investors to take a 30 year position on Pakistan."

Now, there is a benchmark of 5 years, 10 years, 30 years, and the prople who invest in a privatisation programme, can very easily calculate what is the cost of capital for investing in Pakistan.

Which means, he added, that basically the uncertainty as to what should be the return on investment in Pakistan is clear. "We are borrowing now, at 30 years at a rate which is just about 2 percent above the US government,i.e, at which the US borrows," he said as an instance, in response to a question.

The accomplishments have won kudos for the prudent and resilient economic policies pursued by Pakistan, he stated.

Governor State Bank of Pakistan, Dr. Shamshad Akhtar and Economic Advisor to the Finance Ministry, Dr. Ashfaq Ahmed Khan were also present.

Dr. Shah said there used to be a time "when they were not even willing to lend you for one month, and now, we are talking about 30 years. So, this is the difference between the capacity of the economy to service the debt."

He said Pakistan has a declining debt burden, and that means, that the risk of lending to Pakistan is much lower.

 

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Iran-Pakistan-India gas link deal seen in June, despite US objection

DOHA (updated on: April 23, 2006, 12:45 PST): Pakistan, India and Iran are likely to sign their $7 billion gas pipeline deal in June, in defiance of US pressure, Pakistan's and India's oil ministers told Reuters on Sunday.

The oil ministers of Iran and Pakistan had told Reuters on Saturday the three countries were very near final agreement on the project to pump Iranian gas through Pakistan to India.

Iranian Oil Minister Kazem Vaziri had said he expected the signing to take place in Tehran in June, but Indian and Pakistan had not given a precise time scale.

"Most probably it will be signed in June," Amanullah Khan Jadoon said on Sunday.

Indian Oil Minister Murli Deora also said on Sunday a June signing was likely and that he was impatient for progress on the project first mooted more than a decade ago.

"These things have taken so much time. We are all three parties sincerely dedicated to this project," he told Reuters.

Progress has been slow because of hostility between India and Pakistan and, more recently, US opposition to Iran because of its nuclear programme.

When asked about US pressure, Pakistan's energy minister said: "That's the (Pakistan) president's problem. I'm the energy minister. I must take care of energy needs."

The pipeline through Pakistan would link Iran's abundant gas reserves, the world's second biggest, to India's booming economy and it would carry 150 million cubic metres per day of gas for 25 years, Vaziri said

 

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Rs 80.8 billion decline in banking system NFA in eight months

KARACHI (April 23 2006): The net foreign assets (NFA) of the banking system registered a decline of Rs 80.8 billion during July-February FY06, compared with Rs 43.5 billion in the corresponding period of FY05.

The State Bank of Pakistan's second quarterly report for the year 2005-06 said that the FY 06 decline in the NFA was the result of the widening trade deficit that resulted in massive outflow of foreign assets and lower net receipts from external financing.

The report further says that within the banking system, both the SBP and the scheduled banks contributed to the overall decline in NFA.

The decline in SBP NFA was quite in line with the volume of its interventions in the forex market to reduce the exchange rate volatility, while the decline in scheduled banks' NFA was the outcome of expenditure of a stable exchange rate that resulted in a robust growth in trade related lending against FE-25 (foreign exchange circular No 25) deposits.

The report on reserve money was also not very rosy. It said that reserve money growth registered significant deceleration during the period under review while it increased by Rs 87.2 billion (9.59 percent) during July-February FY05.

This deceleration has been attributed to a slowdown in both SBP NDA and SBP NFA during the period under review.

In particular, the report said, the decline in SBP NFA during July-February FY06 was considerably larger than decline during July-February FY05. This was on account of lower inflow under programme loans (mainly from ADB and World Bank) during July-February FY06 compared with July-February FY05.

This slowdown in SBP NDA, despite higher government borrowing from SBP during July-February FY06, was attributed to a sharp decline in SBP OIN (other items net) during July-February compared with July-February FY06

 

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World Bank and IMF laud Pakistan's economic performance WASHINGTON (April 23 2006): The Pakistani delegation has had "very good discussions" with the World Bank and the International Monetary Fund (IMF), during which, "the economic performance in Pakistan was appreciated".

This was stated by Adviser to the Prime Minister on Finance and Revenue Dr Salman Shah, who attended the IMFC meeting on Saturday, which continued till afternoon.

The important two-day annual WB-IMF spring meetings started on Saturday, while the Pakistan delegation is also holding multilateral and bilateral meetings.

Asked to comment on discussions underway, Salman told APP that "there is an ongoing and continuing support for Pakistan".

The meetings are being attended by finance ministers and governors of central banks of member countries from across the world. Earlier, on Saturday morning, the adviser held a meeting with IMF Deputy Managing Director Augustin Carstens.

The leader of the Pakistan delegation had held meetings with World Bank President Paul Wolfowitz and Vice President Praful Patel on Thursday and Friday.

As a result of these meetings, he said, "Our programmes have been scaled up considerably".

These programmes, he added, "are on track" and that "we are putting in the implementation of these programmes to make sure that we get all benefits out of the programmes".

 

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Musharraf discusses IPI gas line with Ahmadinejad ISLAMABAD (April 23 2006): President General Pervez Musharraf and Iranian President Ahmadinejad spoke by telephone on Saturday. They discussed the Iran-Pakistan-India (IPI) gas pipeline project. The two leaders agreed that the experts of all sides should be asked to expedite the work on the pipeline project.

They also expressed support for the tripartite framework

 

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Ecnec approves 22 projects worth Rs 53.7 billion
RECORDER REPORT ISLAMABAD (April 23 2006): The Economic Co-ordination Committee of the Cabinet (Ecnec) met here on Saturday under the chairmanship of Prime Minister Shaukat Aziz and approved 22 projects worth Rs 53.7 billion.

Briefing newsmen about the decisions of the Ecnec, Deputy Chairman of Planning Commission Dr Akram Sheikh said that during its three quarterly meetings this year, Ecnec had approved major projects of infrastructure, education, health and other sectors worth Rs 240 billion, which would accelerate the economic growth and reduce poverty.

He said that the projects approved for improvement of infrastructure in Saturday's meeting included (a) Indus Highway (N-55) Phase III (Rs 6.28 billion ), (b) Bridge over Malir River connecting Shah Faisal Colony with Korangi sector 10 (Rs 1.2 billion), (c) construction of Sohrab Goth interchange on intersection of Shahrah-e-Pakistan and Rashid Minhas Road, Karachi (Rs 580 million), (d) Construction of 140 KM Sibi-Rakhni Road via Maiwand in Balochistan (Rs 1.48 billion), (e) Widening & Remodelling of Islamabad-Rawalpindi roads (Rs 1.22 billion) and (f) Islamabad-Muzaffarabad Road (N-75) Satra (17) Mile to Lower Topa (Rs 8.24 billion).

Akram said that in the health sector, schemes worth Rs 8 billion had been approved, whereas in higher education sector Fullbright Scholarships Support programme (Rs 7.2 billions) has been approved.

He said that other projects include improvement and refurbishing of sewage treatment plants (Rs 2.72 billion), Japanese assisted rural roads construction project phase II (Rs 3.73 billion, Urban water supply scheme phase VI Jacobabad (Rs 1.25 billion), and clean drinking water for all (Rs 7.87 billion).

Prime Minister Shaukat Aziz said that better fiscal management enabled the government to allocate unprecedented amounts for the development projects and the development budget had been consistently increased from Rs 130 billion in 2002-03 to Rs 272 billion in 2005-06. "This is 109 percent increase, resulting in jobs creation, poverty reduction and overall economic uplift," he added.

He said that focus on development was one of the hallmarks of the government pursuing the policy of balanced development with necessary emphasis both on the strengthening of infrastructure and the social sector.

"Whereas the government has allocated funds for the construction of roads, dams, bridges, its top priorities also include improvement in facilities of education, health, sanitation and safe drinking water," he added.

He emphasised that education "is the key to development". Therefore, the government was focusing on improving educational facilities at all tiers.

He said that the new National Finance Commission (NFC) Award would provide additional Rs 52 billion to the provinces in the next budget, so that they could allocate more funds for development projects.

Shaukat said that the development expenditure was instrumental in creation of jobs, decline in poverty and overall economic uplift.

He said that the amount of development expenditure to GDP ratio was enhanced by 3.9 percent this year from 2.6 percent last year, and in the next budget allocation for development projects would be further increased.

He said that all sectors of economy were exhibiting growth, and the government would meet 6-8 percent annual growth target this year. "The Public Sector Development Programme utilisation has shown an upward trend. In the first quarter, PSDP utilisation was 60-65 percent, and by the end of the financial year about 95 percent development funds are expected to be utilised," he added.

Referring to the government's philosophy of deregulation, liberalisation and privatisation, the Prime Minister said that the government wants increased involvement of private sector, particularly in health, education and energy sectors.

He said that the government did not increase oil prices but paid an unprecedented amount of $1 billion as oil subsidy despite the oil prices were going up to $70-75 per barrel.

He said that the Planning Division would be restructured to transform it from a reactive into a proactive organisation, and its monitoring and evaluation wings would be further strengthened to improve implementation of the projects.

 

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World Bank asks CBR to improve zero-rated sales tax regime
RECORDER REPORT ISLAMABAD (April 23 2006): The World Bank (WB) has asked the Central Board of Revenue (CBR) to bring about significant improvement in sales tax zero-rated regime, e-filing of returns, refund payment mechanism for the small and newly registered exporters and tax incentives for the small and medium enterprises (SMEs) and their registration.

Sources told Business Recorder on Saturday that the World Bank (WB) had conducted a study on the 'growth and export competitiveness' for creating a business-friendly environment for the investors. The study would be made part of WB report identifying key factors affecting productivity, competitiveness and overall growth in Pakistan.

The CBR is examining WB recommendations for improving GST refund system, zero-rating regime, e-filing and measures to expand the tax base.

The WB has recommended improvement in the sales tax zero-rating scheme for export-oriented sector by expanding the list of inputs/raw materials consumed by non-traditional export sectors. The decision would benefit the small and new exporters who face more difficulties in claiming sales tax refund as compared to better established ones.

The major exporters, who qualify for the gold/silver categories were given priority in claiming sales tax refund as compared to small exporters.

The WB has also raised some concerns about the facility of zero-rating on domestic sale of the products of five major export sectors (textile, leather, carpets, sports and surgical products).

The primary objective of zero-rating was to encourage exports of zero-rated sectors through speedy refund payment. Since 60 percent of the output of these sectors is being exported, three percent 'retail tax' was introduced on domestic sales to compensate potential revenue loss.

The CBR should preferably rely on enhanced efficiency of the sales tax refund system instead of zero-rating the domestic sale of products, WB observed.

The Bank pointed out that incorrect declarations made by taxpayers on the electronic format of sales tax returns was the major reason of delay in processing claims filed by smaller/new exporters.

In this regard, the board has conducted many training sessions on electronic filing of refund claims in Karachi, Lahore, Islamabad, Faisalabad and Multan. However, the issue of limited IT skill/capacity for correctly filing the electronic claims need to be addressed more vigorously.

The WB pinpointed that registered SMEs were facing problems in obtaining sales tax refunds. This was mostly in cases where the concerned vendor is not registered with the sales tax department. It is necessary to expand the list of sales tax payers to check the blockage of refund claims filed by the SMEs.

The WB noted that the problem of non-registered taxpayers is partly due to high failure rate of small businesses, seasonal nature of a variety of export-related vendors, and a large unregulated private sector.

 

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KARACHI (April 23 2006): The State Bank of Pakistan (SBP) bought back Rs 14 billion ($233.37 million) of Treasury Bills on Saturday in a one-week reverse repo at 8.72 percent to inject liquidity into a tight market.

 

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ISLAMABAD (April 23 2006): Tea imports from India may touch 25 million kilograms this year from the 10 million kilograms imported during 2005 as the visiting Pakistani importers were evincing interests in finalising more import deals with India.

The 12-member delegation of Pakistani importers led by Tea Association chairman Muhammad Altaf tasted over 250 samples of tea from various estates in south India.

The delegation of importers felt that the quality matched some of the material, it imported from Bangladesh where the quality had improved significantly over the last few years.

However, it felt that the prices were slightly higher, and it is learnt that the highest offer made for some of the Indian tea was at $1.25 per kg. Generally, the offer price was in the range of $1 to $1.2.

The country having a tea market for 170 million kilograms was importing around two-third of this from Kenya, and the CTC variety accounted for 97 percent of the total tea consumption.

Pakistan has been importing tea from over 10 countries with Kenya leading followed by India. Imports from India started way back in 1977, and over the years had gone up.

There was a feeling that the Pakistan industry was looking at jet black tea, which could be blended with Kenyan varieties. The prices offered were much lower than the ones fetched in the domestic market. While the average prices were around Rs 45, the offer of something around Rs 50 as the landing cost would not prove beneficial to the industry.

Leading Pakistani importer Abdul Jabbar Paracha said that the price was an important factor and some of the Kenyan tea that matched the south Indian quality was available at less than Rs 45 per kg in Pakistan and the better ones at over Rs 80. Also, in Kenya all the tea were sold through auction and the system was transparent.

Tea Board's Basudev Banerjee said that like done earlier, the Pakistani delegates could have offices in India and through agents could participate in the auctions.

Banerjee said that in just one year, exports to Pakistan had gone up three times and it was important for the industry to build on what had been done, The FE India reported.

 

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BOAO (April 23 2006): Pakistan engaged in strengthening its interaction with China and other regional countries at the level of Boao Forum for Asia (BFA) to promote economic partnership.

This was stated by Minister of State for Investment Umar Ahmad Gumman here on Saturday, while talking to APP. The minister is here at the head of an 8-member delegation to participate in the three-day BFA's annual conference that started on Saturday morning.

Pakistan has been on the forefront making the BFA, an effective organisation for achieving common socio-economic goals through joint efforts. According to Syed Naveed Safdar Bokhari, an officer of the Pakistan Embassy in Beijing, Pakistan's delegation that includes senior business executive will avail the opportunity to enhance its co-operation with member countries.

Meanwhile, Chinese Vice President Zeng Qinghong said China will work for mutual benefit and common development in Asia and the world.

 

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KARACHI (April 23 2006): Differences in South Asia have led to inability to take advantage of the international trading system. This was stated by A N Ram, a former Secretary, Indian Ministry of External Affairs and once its Ambassador to EU.

At the two-day Regional Consultation on 'WTO and South Asia: Strategizing Beyond Hong Kong', organised by 'Centre for Trade and Development (Centad), New Delhi, and Asia-Pacific Trade and Investment Initiative of UNDP-Colombo', held on April 21 and 22, 2006 in New Delhi.

According to a message received here, he said that trade talks could not be conducted, being devoid of the social dimension, as negotiators might be missing the social and developmental connection specific to their constituencies.

Participants expressed concern that political processes in the WTO were running in divergence from development processes needed for gaining from trade.

"The PFQF, in its current state is farcical", said Suhel Ahmed Chowdhary, former Commerce Secretary, Bangladesh. "LDCs spent 20 years changing S&DT clauses from 'should' to 'shall', and now recent evidence suggests that without monitoring mechanisms, 'shall' is useless," he said, signifying his disappointing with the lack of development focus in trade negotiations.

LDCs did not receive any incremental value in Hong Kong, supported Ratnakar Adhikari of UNDP, Colombo.

Engineer M A Jabbar, a former vice president of Federation of Pakistan Chambers of Commerce and Industry (FPCCI), was critical of trade negotiators and questioned whether they were sympathetic to poor stakeholders, and if they were, whether they translated it into negotiating positions. "Government officials should be made accountable if negotiators end up signing poor deals," he added.

"Negotiators often sign international agreements and misinterpret gains", criticised Basil Ilangakoon, Executive Vice Chairman, Marga Institute, Sri Lanka, as political mismanagement, lack of domestic consultation and inadequate reality checks were resulting in poorer gains for developing countries.

Abhijit Das of Unctad India Programme emphasised the need for capacity building of sub-national actors to ensure that agreements include real stakeholders. Since sub-national governments are also bound by trade negotiations, they need to be credibly informed and consulted, he added.

Over hundred South Asian trade experts, policy think-tanks and civil society representatives, including 50 participants from Bangladesh, Sri Lanka and Nepal had congregated at New Delhi to deliberate on providing inputs for development-friendly negotiating positions. This was the first attempt to understand and elicit a measure of consensus among the stakeholders across South Asia towards a development-friendly negotiating position after the Hong Kong Ministerial conference.

Professor Jayati Ghosh, of JNU, said that in the face of a growing agrarian crisis, where small farming has become unviable, South Asian countries are focusing their negotiating energy mainly on market access. Current South Asian negotiating positions at the WTO are based on the optimism fuelled by booming commodity prices, which could be short-lived. She urged that increased market access would only serve the interests of agri-business firms who are dominating agricultural marketing world-wide.

Voicing wide ranging concerns on the current state of trade negotiations at the WTO, delegates expressed grave disappointment on lack of progress on critical issues relating to agriculture, industrial market access and services, in view of the April 30 deadline.

Alamgir Farroukh Chowdhury, a former commerce secretary of Bangladesh, in his inaugural address, declared that despite a spectacular growth in world trade in recent years, empirical evidence showed that gains from trade had bypassed the 'Least Development Countries' of Bangladesh and Nepal because of 'rigged' rules.

About the current state of play at the WTO negotiations, he expressed disappointment and concern at the lack of co-operation between South Asian countries on trade negotiations. "South Asia is not speaking in one voice over the issues as fundamental to addressing development concerns as Duty Free Quota Free (DFQF) for LDCs. Worse, the regional body of Saarc did not even consider it necessary to hold any trade meeting in relation to the ongoing trade negotiations."

Dr Biswajit Dhar, Head of WTO Division at IIFT, was critical of the current confusion between aggressive and defensive interests in agriculture. "India is exploring offensive interests in the form of value-added agriculture and horticulture, which is a flawed strategy," he said. "Subsistence farming, distortions in global trade, possibility of cheaper imports and inadequate disciplines, present a strong case that India should continue to be defensive and work to protect its markets." He argued that agriculture negotiations must focus on people, and not look at GDP growth figures, as bulk of the people derive their livelihood from agriculture.

Dr Dhar called for agreement on an end date for elimination of all forms of domestic support in the current round.

Dr Debapriya Bhattacharya, Executive Director, Centre for Policy Dialogue, Bangladesh, underlined the need for taking on board the need of net food importing countries in the current negotiations. The consultations deliberated on issues of agriculture, Nama, services, trade policy formation process relating to the ongoing negotiating positions.

 

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FAISALABAD (April 23 2006): The City District Government Jhang will complete 617 uplift schemes with Rs 659.6 million during the current financial year to provide basis amenities to the people of urban and rural areas.

District Jhang Nazim Sahibzada Sultan Hameed said this while talking to the different delegations at his office. He said 343 new developmental schemes at the cost of Rs 273.8 million had been included in the current budget while Rs 386.8 million had been allocated for the completion of 274 ongoing schemes. He said the concerned departments had been directed to complete these uplift schemes before the end of this financial year.

Giving details, the district nazim said the development schemes included 323 schemes of construction of roads, 182 of rural electrification, 27 of officials buildings' repair, 13 schemes of sewerage and drainage, 39 of education, 12 in health, 10 in sports, eight in culture, three each in Sui gas and agriculture sectors.

The district nazim also heard the people's problems on the occasion and issued orders for its redressal.

Meanwhile, the training programmes are continuing in 568 villages of the district to educate the farmers about the modern and scientific production technology of the cotton crop by the Agriculture Department. Agriculture District Officer Abdul Hameed said this while talking to newsmen here. He said 19 teams comprising agriculture experts were engaged in these training programmes. He said the training programmes under phase III would be completed at the end of May.